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jeyben [28]
1 year ago
15

martin's has current assets of $600 and total assets of $2,900. the firm has total debt of $1,500 and long-term debt of $1,100.

what is the current ratio? multiple choice question. 1.5 0.4 2.6 0.7
Business
1 answer:
lions [1.4K]1 year ago
3 0

The current ratio is 1.5.

<h3>What is the current ratio?</h3>

Current ratio is a liquidity ratio. Liquidity ratios measure a firm's ability to honour its short terms obligations.

Current ratio is the ratio of current assets to current liabilities. Current assets are assets that would be used up in a year. Current liabilities are debt obligations that would be settled within a year. Current liabilities excludes long-term debt.

The higher the current ratio, the higher the firm's liquidity and its ability to meet short term obligations.

Current ratio = current asset /current liability

= 600 / (1500 - 1100)

= 600 / 400

= 1.5

To learn more about financial ratios, please check: brainly.com/question/26092288

#SPJ1

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